Highlights
The nation's trade deficit widened but only slightly in July, to $43.7 billion from a revised $43.5 billion in June. The improvement in July is in the goods deficit, showing no change at $65.3 billion. The trade surplus for services fell 0.8 percent to $21.6 billion. Today's results get net exports off to a neutral start for third-quarter GDP.

Exports fell 0.3 percent overall but include a $1.1 billion rise for aircraft and a $0.4 billion increase for food products. Exports of consumer goods were down $0.7 billion with auto exports and nonmonetary gold exports both down $0.6 billion. Turning to imports, they were down 0.2 percent reflecting a $0.9 billion decline in petroleum (due to lower volumes and lower prices) and $0.8 billion declines for autos and $0.7 billion for industrial supplies.

Country data show another widening with China, up $1.0 billion to $33.6 billion, and widening with EU, up $0.9 billion to $13.5 billion. The trade gap with Japan widened slightly to $5.8 billion with the gap for Mexico down a sizable $1.1 billion to $4.9 billion and the gap with Canada up $0.5 billion to $1.0 billion.

Consensus Outlook
Forecasters see the international trade gap for goods and services widening to a consensus $44.6 billion in July from $43.6 billion in June. This would be in line with advance data on the goods part of the report which, reflecting weak June exports for vehicles and consumer goods, widened sharply.

Definition
International trade is composed of merchandise (tangible goods) and services. It is available nationally by export, import and trade balance. Merchandise trade is available by export, import and trade balance for six principal end-use commodity categories and for more than one hundred principal Standard International Trade Classification (SITC) system commodity groupings. Data are also available for 48 countries and 7 geographic regions. Detailed information is reported on oil and motor vehicle imports. Services trade is available by export, import and trade balance for seven principal end-use categories.
Why Investors Care

Exports grow when foreign economies are strong. The weaker the foreign exchange value of the dollar, the less expensive goods and services are to foreigners, and this also helps spurt export activity. Imports grow when U.S. economic growth is robust. Imports are also spurred by a strong foreign exchange value of the dollar.Data Source: Haver Analytics

The nation's international trade
balance has been in continuous
deficit since the 1980s. Yet
trade, even though in deficit,
can still add to GDP provided the
deficit is narrowing. A deepening
deficit is a negative for GDP.Data Source: Haver Analytics